Nobody expects Jim Flaherty to be shuffled out of Finance as his intention is to balance the budget by the next election.

We’re told the Prime Minister had fireside chats with members of his cabinet and from caucus to discuss their future plans. Older ministers who are retiring have been asked to step aside for new blood. Older ministers who have not indicated an intention to retire may have been asked to do the same (Kent). The only exception to this might be Flaherty and Oliver (both are in critically important political files at key junction points — Flaherty and budget balance and Oliver on the KXL decision).

One of my sources on the cabinet shuffle told me to expect a lot of new faces in cabinet.

Shelly Glover has been spotted in Ottawa today. She is a Manitoba MP who many observers speculate will be occupying a chair at Prime Minister Harper’s cabinet table.

Tony Genco is the Liberal by-election candidate in Vaughan. He was appointed CEO of Downsview Park in a patronage spree by Paul Martin’s government in 2005:

Jack Aubry’s May 28, 2005 piece:

OTTAWA – With a snap election hanging over their heads, the Martin cabinet quietly oversaw a patronage spree during the last month as it neared a too-close-to-call vote in the House of Commons that threatened its hold on power.

The Liberal government hurriedly approved about 450 orders-in-council starting around the time in April when Prime Minister Paul Martin prepared to address the nation in a televised broadcast to plead his case for a delay in holding a federal election.

One issue that challenged Genco when he was CEO comes to us via Rabble.ca,

After hearing complaints from the LGBT community about the controversial performer’s violently anti-gay lyrics (sample: “Queers must be killed!” “Give me the Tec-9/Shoot dem like bird”), Parc Downsview Park CEO Tony Genco has refused to pull dancehall act Elephant Man from an upcoming show scheduled for this Sunday Oct 10 at the federal park.

This is Elephant Man’s (real name O’Neil Bryan) second scheduled performance in the Toronto area this year. Back in August, he was scheduled to perform at Circa nightclub in downtown Toronto but the club decided to drop him from the concert after club officials received complaints and were informed of his homophobic lyrics. Word of the show had spread to the LGBT community via Twitter and Facebook and only hours after announcing the show, Circa sent this tweet: “Circa stands for peace, love and equality. Elephant Man has been removed from the Celebrity Ball.”

Now, over a week after receiving complaints and being fully briefed about some of his lyrics (eg. “Log on and step pon chi chi man/Log on and step on a queer man”), PDP CEO Tony Genco refuses to pull Elephant Man from the show at the federal venue even after a privately-owned club decided weeks ago — in the spirit of “peace, love and equality” — he should not perform on their stage.

So, what happened? John Baird, the federal minister in charge of Downsview Park was alerted to the controversy by Olivia Chow. The article continues,

[UPDATE]: An official release is expected from Parc Downsview Park but a spokesperson has confirmed that Elephant Man has been pulled from the show, saying “we have been directed by Ottawa to pull Elephant Man.” Earlier today after this article was posted to twitter and spread by dozens of users, MP Olivia Chow also shared it with her followers – adding: “Protest now & copy to Minister Baird #cdnpoli” (#cdnpoli is a popular Twitter hashtag amongst political tweeters). Her tweet with the link to this page found its way to Minister Baird and soon after the announcement was made by the Park that Elephant Man had been pulled. Later, Chow tweet: “From Downsview Park: directed by Ottawa to pull Elephant Man. Min Baird listened.”

I’m told Baird’s surprise response to questions about Glemaud/Jaffer set the Liberals scrambling on their lobbyist line of attack against the government. The government suggests that opposition MPs should register their meetings with lobbyists while the Liberals seem to disagree. Introducing Lee’s Sun & Partners bio into the debate clouds the Liberal efforts on establishing a narrative against the government on inappropriate lobbying.

The Liberals are trying to show that the Conservatives are no saints on transparency and accountability, while the Conservatives are trying to show Canadians that the Liberals still cannot advocate from a position of moral clarity on the same issues.

Meanwhile, aside from the sideshow that is Parliament — over there, look! It’s something that Canadians actually care about:

Cocaine, busty hookers and lobbying might make an interesting show for trash TV, but the Parliament Show keeps getting poor ratings. Anyway, didn’t CSI or Law and Order already do that show? (they’ve done every other show…) Besides, their casting is much better. I still can’t believe Michael Ignatieff has returned for another season to reprise his role as the aloof professor that just doesn’t care.

Hon. Jack Layton (Toronto—Danforth, NDP):
Mr. Speaker, honesty is the best policy. That applies to the HST, even though the Conservatives are blaming the provinces. With the help of the Liberal Party and the Bloc Québécois, the Conservatives are going to raise taxes on heating fuel, which will hurt people in northern Ontario and elsewhere.

How, in good conscience, can those people vote to increase families’ heating costs next winter? How can they do that?

Hon. John Baird (Minister of Transport, Infrastructure and Communities, CPC):
Mr. Speaker, getting a lecture from the NDP with respect to taxes is quite something. I never thought I would live this long to hear it.

This is the government that brought forward major tax reductions for Canadian families, major tax reductions for small businesses, major tax reductions with respect to the GST. Every single time the Prime Minister and the Minister of Finance tried to cut taxes, they faced the wholehearted opposition of the NDP and leader of the NDP who wanted to keep the GST at 7%. The only problem the NDP has with the HST is that it is not 2% higher.

Our office in downtown Ottawa today hosted potential Ontario PC leadership candidate Tim Hudak for a meet and greet with friends and colleagues on Parliament Hill today. Many thanks to Dimitri Pantazopoulos and Phil von Finkenstein for coordinating and to Chris Froggatt for tieing it all together.

Hudak spoke about returning Ontario to a clear sense of conservatism and will be attending the Manning Centre conference this weekend.

On the developing news front, I’ve learned that Hudak is receiving the endorsement of Rob Nicholson, the federal minister of Justice. Does Froggatt’s involvement with today’s event mean that endorsement from his boss John Baird will follow?

The Manning Centre is hosting a reception tonight prior to our conference and I can confirm that Tim Hudak, Christine Elliott, Randy Hillier and Peter van Loan will be in attendence. The Manning Centre conference will be the first significant venue for leadership pre-campaigning.

Last night, supporters of the Fraser Institute gathered in the Adam hall of the Chateau Laurier to listen to federal finance minister Jim Flaherty deliver an assessment of the Canadian and global economies. On Thursday, the minister will be delivering a sobering fall economic update in the House of Commons and last night, we got a hint of what might be to come.

Flaherty was introduced by former Ontario PC Premier Mike Harris, the finance minister’s former boss and mentor. Harris disappointed the crowd saying that he was not about to return to politics but that a deep-rooted fixation on Canada’s future prosperity is one that both he and Preston Manning hold. Manning and Harris are the authors of Canada: Strong & Free, a six-volume set of books describing Canada’s ideal path along internationalism, economic freedom, federalism, and education among other topics. Last night’s dinner was held to mark the release of their sixth summary volume called Vision.

In minister Flaherty’s speech, he described Canada’s position in a rapid yet sustained decline of the global economy and while trumpeting Canada’s economic leadership among G7 nations, we are simply the country that is sinking the slowest. Indeed, at a recent meeting of the G20 finance ministers, Mr. Flaherty revealed that not one minister was optimistic about their economies domestic or international. Flaherty will project a surplus through the end of this fiscal year ending April 2009, however, as he conceded the next fiscal year will present “a challenge”. The minister sketched a fiscal portrait in broad strokes declaring that the crisis will not end tomorrow, next week or in the next few months and warned that we have not yet seen the worst of the situation.

Yet despite its faltering position, Canada is an economic leader among its economic peers. Flaherty described the economic measures implemented by the federal government to prepare for such an eventuality saying that they’d never apologize or regret cutting the taxes of Canadians or bringing in more stringent regulatory frameworks to maintain Canada’s economic structure. Indeed, the IMF, as Flaherty noted declared Canada to be the best economic shape going into the global economic downturn.

In the United States, President-elect Barack Obama has conceded that he will delay the rollback of the Bush tax-cuts and in Canada, Flaherty suggests that this Conservative government will maintain Canadian tax-cuts to retain this increased spending power among Canadian consumers.

Perhaps the worst-kept secret in Ottawa is that this government will project a deficit in the near future. Flaherty has declared that he will sing from the same songsheet as other national government and use the federal treasury to stimulate growth, or rather stem the “negative growth”. For this, infrastructure minister John Baird will become a hero of sorts in Ontario as federal dollars are channeled through on road, rail and other contruction projects sustaining jobs. Prime Minister Harper days earlier declared that some deficits provide opportunity and are necessary. Flaherty promised that the stimulus would be underway by March 2009. The pairing of the temporary and artificial sustenance of Canadian jobs via government spending with the consumer spending power of a less-tax-burdened population may help the good ship Canada weather the global economic storm until it subsides. Or at least the theory goes.

Deficit spending will be accomplished in order to sustain the “real” economy. Flaherty promised no ‘structural’ deficit.

For my part I asked the minister during the dinner about conservative opportunity describing this as a time when Conservatives in power could be allowed to make cuts to government spending and suggested that a reduction in the size of government rather than its growth would help balance the books in a real rather than artificial way. The finance minister unfortunately balked at the question suggesting that some areas of growth are necessary such as the rescue of the state of the armed forces. If given a follow-up, I would have suggested that some cuts are necessary too. Even in a recession, the government is a growth industry. The minister described a treasury board review of all programs to measure value for money and promised to extend this review through both core and non-core assets.

As for the public sector, wages will not increase faster than the private sector. This has caused some concern among public sector employees and the minister reached a deal with PSAC, it’s largest union late yesterday. The two parties have settled on a wage increase of 6.8% over the next four years.

On interprovincial trade barriers, the minister promised to break these down and suggested that the current economic climate behooves governments to allow uninhibited trade within Canada. The minister welcomed a cooperative spirit among provincial and territorial ministers on addresses the economic downturn domestically.

The minister declared that the government would not artificially engineer a surplus. Perhaps this is a reflection by the minister on Paul Martin’s method of balancing budgets by slashing transfers to the provinces and “fixing” healthcare for a generation. Ontario has warned Ottawa not to balance its books on the back of the province and what is needed is economic stimulus in the province through reduction of its corporate tax rate. For the part of the Conservative federal government, Flaherty described a $37B debt reduction, a reduction of the tax burden by $200B and a 2012 projected corporate tax rate of 15%.

On securities regulations, the minister promised the creation of a single national securities regulator. The federal government will seek to regulate leverage and large pools of capital. A more transparent market infrastructure is needed according to Mr. Flaherty.

The sum of Flaherty’s speech was to say that this government is acting to sustain economic activity for the foreseeable future as economies around the world reconfigure to recover. Taxes will remain low, spending is temporary and a deficit would be a temporary and an short aberration from Canada’s economic plan.

10:55AM: Raitt to NRCan, Day to International Trade and Asia-Pacific Gateway.

10:55AM: Ambrose to Labour.

10:58AM: Prentice to environment. The could be to negotiate new regs with the provinces when it comes to GHG emissions. Alberta will need to sit down with the federal government soon to finalize the new regulations for the oil and gas sector.

Wildly and so irresponsibly speculative:
– Raitt to get NRCan (doubtful)
– Liberal crosses the floor and enters cabinet (sourced at a high level, but I don’t see it happening. Yet, a number of Liberals staffers have been confirming they’ve heard the same rumour for days)
– Rob Moore in cabinet

Tomorrow, Prime Minister Stephen Harper will name his new cabinet at Rideau Hall at 10:30am. There is a lot of speculation flowing out there and from this, I’ve been able to discern a few facts.

First, the easy facts: cabinet will be larger and have more women. Stephen Harper was returned to 24 Sussex on October 14th with an increased minority. Among the new seats gained by the Tories include a number of well-qualified women.

Second, Jim Flaherty stays in finance. In a time of global economic uncertainty, and after an election fought on stability in these times, changing the minister of finance could be seen as a bad signal to the world.

A few speculated that Helena Guergis may be retiring to the backbench. However, Guergis has told her junior ministerial staff that they’ll be employed in her office for at least the short-term future. I’ve also heard that Guergis is moving portfolios. Josee Verner is also moving portfolios.

Environment minister John Baird will also be moving portfolios now that green leader of the opposition Stephane Dion is stepping down. Baird was the go-to guy for acting as a shield for the government on tricky portfolios. He’ll move on to new responsibilities in cabinet.

As of Friday night, when most cabinet hopefuls had received their calls from the PM invited them to serve in the new cabinet, Maxime Bernier was left waiting. A few speculated that he’d return to cabinet, however, it seems that he’ll have some more time in the penalty box.

The newly minted Member of Parliament from Nunavut Leona Aglukkaq will serve in the next cabinet. Stephen Harper personally recruited the former territorial minister and has made northern sovereignty a defining issue of his Prime Ministership. Aglukkaq would be the first female Inuit to serve in federal cabinet. It is expected that she’ll become responsible for the new opportunities agency for the north.

Speculative news that I’m hearing is that Trade will be shifted from Foreign Affairs to Industry and that the Minister of Industry would also assume duties for this portfolio. Or, alternatively, trade will be under Industry bur will have a separate minister. The last election saw the defeat of Harper’s trade minister and a failure to re-offer by his foreign affairs minister.

On foreign affairs, I’m hearing that Lawrence Cannon will herd the cats at DFAIT. A french-speaking and centrist Conservative, Cannon may be Harper’s choice to head that portfolio.

In departmental news, I’m hearing that Transport and Infrastructure will be broken into two. Rookie MP Lisa Raitt may be a perfect fit for a reduced transport portfolio, while a Toronto area minister such as Peter Kent may fit the bill to shower the region with infrastructure development money. UPDATE: A bureaucrat that has seen the briefing books for Transport’s next minister says that infrastructure is still part of Transport’s mandate.

Will there be another Liberal defection to cabinet? I’m hearing yes and that it’ll be from Quebec (I’d categorize this as speculative even though my high level source seemed to be certain). After the last election Vancouver MP David Emerson jumped from the Liberal ranks to sit as a Conservative cabinet minister. With a Liberal party in ruin, we may just see one or more defections tomorrow.

UPDATE: Tony Clement is now confirmed as moving from the Ministry of Health.

UPDATE: Jim Prentice is expected to stay at Industry.

UPDATE: I’m hearing that Verner is going to intergovernmental affairs.